At the Core of the International Financial System

26 Pages Posted: 15 Apr 2013

See all articles by Valentina Feroldi

Valentina Feroldi

University of Trento - Department of Economics and Management

Edoardo Gaffeo

University of Trento - Department of Economics and Management

Date Written: April 13, 2013

Abstract

This paper offers additional evidence on the structure of the international financial network as emerging from the Coordinated Portfolio Investment Survey (CPIS) dataset collected by the IMF. Making use of blockmodeling techniques which allow us to fit a given community partition to real data, we show that the system is characterized by the presence of a particular type of meso-scale structure known as core-periphery, in which a densely connected subset of nodes (core) coexists with a sparsely connected partition (periphery), while the members of the core act as intermediaries between members of the periphery. The composition of the core - whose constituents are identified as the set of systemically-important international financial centers - is rather small and remains stable over time. In addition to very large economies playing host to well-known global financial centers, the core comprises several off-shore financial markets.

Keywords: International financial system, intermediation, network analysis

JEL Classification: F36, G15, E44

Suggested Citation

Feroldi, Valentina and Gaffeo, Edoardo, At the Core of the International Financial System (April 13, 2013). Available at SSRN: https://ssrn.com/abstract=2250318 or http://dx.doi.org/10.2139/ssrn.2250318

Valentina Feroldi

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

Edoardo Gaffeo (Contact Author)

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, Trento 38100
Italy

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